Theory Of Life Insurance
A life insurance is basically a contract made between an insurance company with a client or an insurance policy holder under which the insurance company is bound to give a decided amount of payment to the policy holder’s family upon his death. The client mostly pays a premium amount to the company each month or even as a lump sum which usually includes the expenses of the funeral and other necessary ceremonies. The company pays the amount to the client in some special cases also depending upon their contracts such as fatal illness or a critical disease. The rules and policies of the life insurance companies vary in different countries and also from company to company. Some companies also offer different types of contracts to their clients which may satisfy their requirement somehow. These policies were made in the first place for the peace of the individuals which bother some people about their demise and the financial concerns of their family.
The life policies are legal contracts allowed by the governments now. Initially these policies were not appreciated by many people because of their superstitious beliefs but later on these were highly expended by the people because of the rising competition in the survival of the people making the financial assets very necessary. There are special elimination and segregation cases of certain elements or incidents which make the life insurance policy doubtful or even terminate for a client. One of these cases is the suicide clauses made in the contract. Also the murder clauses are included which make the cases complicated. The suicide of the policy holder within a specified time makes it null and void. In United States the insurance company offers a given time period usually 2 years to pay the premium and also the time for the contract to be legible during which if the client passes away then his right of the payment will be decided by the company upon certain grounds and also their policies. The life insurance companies make complete calculations of the amount to be paid in any case to the client.
Also special records and tables are also included in the insurance contracts such as different policies are offered to the smokers and non smokers etc. these are recorded in the mortality table which ensures the company to make profit in any case. The estimates of the insurance companies have been very precise depending upon their experiences and their level of understanding of the clients’ background. Along with tobacco usage, the age and gender of the clients are also included in their mortality tables. The life insurance companies have developed many ways and methods to make all the contracts fruitful for them.On the other hand the clients are also the beneficial in case of the insurances they make for themselves and their families. The individual have the contention that in case of any unfortunate mishap with them might not turn their families deprived of all the opportunities in life to move further.
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